By Stuart Condie


SYDNEY--National Australia Bank raised its first-half credit provisioning by more than US$215 million, becoming the latest major lender to seek protection from the Iran conflict's impact on Australia's economy and businesses.

NAB is Australia's third-largest bank by market capitalization but is the country's largest business lender. As such, analysts had flagged its exposure to any economic downturn resulting from conflict in the Middle East.

On Monday, NAB said it would increase its forward-looking collective provisions by 300 million Australian dollars, or US$215.1 million. More than half of the increase covers sectors most likely to suffer from fuel supply constraints and cost increases.

Two of the three Australian banks scheduled to report first-half results in the next three weeks have now increased provisioning.

Westpac last week announced higher impairment charges and a new overlay for energy intensive sectors, which have been hit by surging costs since the U.S. and Israel attacked Iran in late February. Airlines have already flagged surging fuel prices, while the agricultural and manufacturing sectors are also exposed.

"National Australia Bank has reviewed its credit provisioning and capital settings to better reflect the risks now inherent in our business," the bank said.

NAB said it expected to report collective provisions for the six months through March of A$706 million. Estimating a 45% chance that its gloomiest economic predictions will eventuate, NAB added A$152 million in provisioning related to the broader economy.

It will also set aside A$201 million in additional provisions to cover sectors most likely to be exposed to stress from fuel supply constraints and cost increases. The increase was offset by a A$53 million provision release.

Aiming to offset the impact on credit quality, NAB said it would discount and partial underwrite its dividend reinvestment plan following the May 5 release of its fiscal first-half result.

NAB said it would record a one-off accelerated amortization charge of A$1.35 billion after changing its software capitalization policy to reflect what it said was a rapidly evolving technology environment. It will fully write off some assets.


Write to Stuart Condie at stuart.condie@wsj.com


(END) Dow Jones Newswires

04-19-26 1936ET